­Profitabi­­lity of Winter Cereal Rye in Integrated Crop-Livestock Systems­­

By Alejandro Plastina

Despite the numerous environmental benefits associated with cover crop use, such as reducing erosion, improving infiltration, mitigating nutrient loading in surface waters, and improving soil health, many farmers in the Midwestern United States are still reluctant to include cover crops in their production practices. The Iowa Farm and Rural Life Poll (Arbuckle 2016) reports potential economic impacts had moderate-to-very strong influence on changes in 74% of producers’ management practices, and 57% of them agreed with the statement “pressure to make profit margins makes it difficult to invest in conservation practices.” The peer-reviewed literature based on survey methods (Plastina et al. 2018a, b, c), field experiments (Thompson et al. 2020), and simulations from physical models (Marcillo et al. 2019), conclude net returns to cover crops in the US Midwest were predominantly negative, even after accounting for cost-share payments.

In integrated crop-livestock systems, cover crop biomass in early spring can reduce dependence on stored feed, and thus reduce feed costs (Lundy, Loy, and Bruene 2018; Phillips et al. 2019). Malone et al. (2022) suggest harvesting cereal rye for forage between mid-May and early June before planting soybeans in the north-central United States could be economically viable, particularly if producers did not observe soybean yield losses from the double-cropping alternative (Gesch, Archer, and Berti 2014; Nafziger et al. 2016). 

Using experimental agronomic data from six location-years in Iowa and a partial budget framework, Plastina et al. (2023) evaluate the annual private net returns to cereal rye as a winter cover crop in the no-till corn phase of an integrated corn-soybean and cow-calf system in Iowa. They calculate the annual net returns to cereal rye in an integrated crop-livestock operation as the direct sum of the net returns in the crop system and the simulated net cost savings in the cow-calf enterprise, by planting date and method, seeding rate, and termination date. Net returns in the absence of grazing average -$50.08/acre and are negative for 82.2% of the treatments, while net returns under grazing average -$6.17/acre and are negative for 54.8% of the treatments. Early-broadcast cereal rye produces higher biomass and larger net cost savings in the livestock enterprise than late-drilled cereal rye, but it also results in higher corn yield penalties. In the no-grazing scenario, net losses for early-broadcast cereal rye are $67.16/acre larger, on average, than for late-drilled cereal rye. 

The findings from Plastina et al. (2023) have multiple implications for farm management: 

  • First, the statistical relationship between higher cereal rye biomass in the spring and lower subsequent corn yields showcases the trade-off faced by farmers between producing higher environmental services and incurring economic losses. Private net returns to cereal rye in the no-grazing scenario are negative for 82.2% of the treatments and average -$70.77/acre for those treatments. In the absence of large financial incentives (subsidies, cost-share payments, or payments for ecosystem services) their findings suggest cover crops will not be adopted at large scale in Iowa.
  • Second, average net returns are significantly less negative in late-drilled plots than in early-broadcast plots in the no-grazing scenario, as higher rye biomass negatively affects corn yields relatively more in the latter than in the former plots. This suggests Iowa farmers would be more likely to break even if the planting date-method combination could be adjusted to achieve their environmental goals while minimizing corn yield losses. Late-broadcasting cereal rye (which was not explored in the study), could produce similar or even higher net returns than late-drilling, given the lower expenses associated with the former planting method. 
  • Third, since seeding rates and target termination dates are not statistically significant factors affecting net returns to cereal rye in the no-grazing scenario, farmers could benefit from further research exploring the use of lower seeding rates and flexible termination dates to minimize costs subject to achieving their environmental goals. Marcillo et al. (2019) report less negative private net returns to cereal rye at lower seeding rates.
  • Fourth, the finding that 45.2% of the plots under grazing obtained average net returns of $43.32/acre suggests that cereal rye could be profitable to a sizable share of the integrated row-crop and cow-calf production systems in Iowa when using rye biomass as forage. Figure 1 illustrates the relationship between net returns to cereal rye in the grazing scenario and total biomass produced by termination date (both grazed and left in the field). It seems to suggest that in order to be profitable while providing ground cover and its associated environmental benefits, cereal rye has to produce a total biomass of at least two tons (2,000 lbs) per acre by termination date. However, this is a testable hypothesis that should be further explored with a larger sample size.
Figure 1. Net returns to grazing versus total biomass produced by termination date (grazed and left in the field).
Figure 1. Net returns to grazing versus total biomass produced by termination date (grazed and left in the field).

The findings from Plastina et al. (2023) also have multiple implications for policy analysis. Since USDA considers grazing livestock on cereal rye a good farming practice in Iowa, implementing this practice does not impact farmers’ ability to receive government payments or subsidies or their amounts. If the average incentive of $33.83/acre from the USDA Environmental Quality Incentives Program (EQIP) to plant cereal rye in Iowa (Sawadgo and Plastina 2018; Myers, Weber, and Tellatin 2019) had been applied to all treated farms in the Plastina et al. (2023) analysis, the percent of plots that would have generated positive net returns in the no-grazing scenario would have increased from 17.8% to 42.2%. While this seems like a substantial achievement, it is relevant to highlight that even under such a generous incentive, 57.8% of the treatments would have incurred annual net losses. Even after doubling the cost-share incentive to $67.66/acre, 37.8% of the treatments would have not broken-even in the no-grazing scenario. In the grazing scenario, cost-share incentives to plant cereal rye of $33.83 and $66.67/acre would have brought the share of profitable farms to 69.0% and 90.5%, respectively.

Additionally, it is important to consider the differential impact of the same EQIP incentive across low- versus high-biomass producing practices, conceptually represented in the study through late-drilled versus early-broadcast plots, respectively. In the no-grazing scenario, 66.7% of the plots with low-biomass and 14.3% of the plots with high-biomass would have obtained positive net returns after receiving EQIP payments. This comparison should inform policy discussions on the cost-effectiveness of public programs to achieve environmental goals and induce research on the social net returns to alternative cover cropping methods targeting high-biomass production. 

Under grazing, the differential impact of a $33.83/acre EQIP payment on private net returns across low- vs. high-biomass plots would have been much smaller: 66.7% of the low-biomass plots and 71.4% of the high-biomass plots would have obtained positive private net returns. However, further research is still needed to understand the social net returns to cereal rye planted for forage.


Recent evidence from cover crop experiments should raise awareness about the low probability of obtaining positive annual private net returns to cereal rye in Iowa in the absence of sizable targeted financial incentives, and inform the policy discussion on the cost-effectiveness of government-sponsored conservation programs.


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Suggested citation

Plastina, A. 2024. “Profitability of Winter Cereal Rye in Integrated Crop-Livestock Systems.” Agricultural Policy Review, Winter 2024. Center for Agricultural and Rural Development, Iowa State University. Available at: https://agpolicyreview.card.iastate.edu/winter-2024/profitabi-lity-winter-cereal-rye-integrated-crop-livestock-systems.